By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
"They made people think I must have taken money," Wilkerson says. "Well, when the audit was turned out they found out I donated cash to the school up there. I put in over $100,000 and never took a salary. That was never reported either, but it's in the audit."
Shortly after the allegations surfaced, Wilkerson suffered what his son described as a heart attack. Wilkerson was on his way to Texas for surgery.
Mike and Marsha Williams know that operating a private school is not easy. They founded Liberty Christian High in Northeast Dallas in 1996 for their two children and to provide another high school option for the Lake Highlands area. After four years, the school had about 110 students and about 20 teachers and staff. The Smithsonian Institute recognized the school for both its innovation and technology-based curriculum, Mike Williams says.
"The school was doing well. It was a technology-oriented school. We were pleased with the education the kids were getting. It was very positive. The problem was financial. We needed a supporting institution like a church or needed an elementary school to attach to it to spread administration to a larger base of students."
Liberty was operating in the red and had about $150,000 in bills. In addition to the value of the existing teacher structure and student body, it possessed assets of about $500,000, Williams says. Wilkerson had arrived in Dallas, purchased the church and school at Eastlake and posted school information on the Internet. From Eastlake's Web site, Liberty administrators saw that Wilkerson wanted to expand his school into the upper grade levels in the fall of 2000, Williams says.
It seemed like a good match and a good way to allow Liberty's students to stay together and keep their fledgling school alive, he says. Besides, when they met Wilkerson, he portrayed himself as having the kind of deep financial pockets that could support the ups and downs of a small private school's finances, Williams says.
"He did say to us that he had just made $17.5 million off the sale of hotels, a set of hotels that he owned," Williams says.
"He said he had paid $1.7 million for that building [Eastlake], paid cash. We were later to find out that he had not paid them cash; he had given them a promissory note and that he had pledged some stock." Wilkerson denies that he ever said he planned to pay for Eastlake with cash, but in the fall of 2000, he was counting on an influx of cash from the sale of hotels to a Dallas businessman. He said his children's company acquired seven hotels, which were sold to a Dallas businessman.
"He and his partners and all of his companies guaranteed me $1.6 million by September. He bought our hotels," Wilkerson says. "When I bought the church, I had a million six hundred thousand coming, and we had a million dollars in the bank, the whole family did."
Williams says before they agreed to a deal, they told Wilkerson how much Liberty's books were in arrears and that Wilkerson seemed undaunted.
"Our deal with him was we bring our bills, and you've got $150,000 to pay off, and we're handing you over a half-million dollars' worth of equipment that you would have had to buy on your own," he says. "We felt like it was a win-win deal. He got a lot of stuff way below, less than a third of what it would have cost him to buy it otherwise. He got a ready-made school, fully accredited with a Smithsonian Award for technology, all kinds of things that he can hype to draw in students."
In the fall of 2000, Liberty became a part of Eastlake and turned over its accounting. None of the Liberty founders received money in the deal. Wilkerson balked at putting anything in writing despite numerous attempts to get him to do so, Williams says. Williams and his wife maintained an interest in the school, and Mike Williams served on the board, but for all practical purposes, Eastlake and Liberty became one and the same, housed in Eastlake's building and sharing Eastlake's administrative and other resources.
"By late fall, getting into December...we were getting overdue bills that hadn't been paid," he says. "When the bills weren't getting paid, we finally became aware that something wasn't right. He started pressing us for donations to pay bills. That's when we really got suspicious. He's sitting here supposedly with this multimillions of dollars and he's basically whining at us that he can't pay bills, the school and the church can't pay its bills."
In February, Wilkerson told Williams and the other former Liberty administrators that he would not be paying Liberty's bills after all, Williams says.
"He told us very clearly he didn't have any intention of paying those back bills, that we had to go pay them," he says. "So at that point he had completely reneged on his commitment. In essence, he had the intention of taking the assets, taking the students, taking the teachers, taking the tuition, taking everything that we brought over and not paying the bills that he had committed to pay."